Application of a Multi-Period Double-Difference Model in Water Use Efficiency

This study assesses the effectiveness of China's water resources taxation reform on usage efficiency of water depending on China's provincial panel data from 2010-2022 using a multi-period double-difference model. The findings indicate that: The water resources taxation reform is able to significantly increase water resources utilization efficiency, in which the incentive effect on industrial water use efficiency is stronger than that on agricultural water use efficiency and domestic water usage efficiency. In the meantime, influence of water taxation reform on the whole usage efficiency of water, agricultural usage efficiency of water, industrial usage efficiency of water and domestic usage efficiency of water in the eastern, middle and western regions also differs to different degrees. Based on this, it is recommended to further deepen water taxation reform, promote the expansion of the pilot program as well as implementing differentiated policies according to local conditions.